ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb warned on Sunday that Pakistan will continue to seek International Monetary Fund (IMF) bailouts if it fails to increase tax revenue.
The minister stated that he was “relatively confident” of reaching a staff-level agreement with the IMF this month for an estimated loan of $6-$8 billion. In an interview with Financial Times, the Finance Minister said that it would not be their last programme if they don’t bring their tax revenues up.
His remarks came as Pakistan’s federal government presented the tax-loaded Rs18.877 trillion budget for the financial year 2024-25 (FY25) last month, aimed at shoring up revenue and satisfying the IMF, which has repeatedly demanded boost tax collection.
The budget aims to increase Rs13 trillion by next July, a roughly 40% rise from the current fiscal year, to bring down a ruinous debt burden that has caused 57% of government revenue to be swallowed by interest payments.
The new budget also threatened punitive steps for tax avoiders, including restrictions on mobile phones, electricity and gas access and the ability to fly abroad.
He said, “We do not have five years for our programme. We have to start showing, start delivering, in the next three months.” “The direction of travel is positive, and investors are expressing confidence in the stock market,” said Finance Minister, referring to the KSE-100 index, which is one of Asia’s best-performing year to date. However, he admitted that the government faces a considerable issue in putting Pakistan on the path for longer-term growth and debt sustainability.
